Hierarchies, ties and power in organizational networks: model and analysis

Original Article
  • 500 Downloads

Abstract

An organizational structure consists of a network where employees are connected by working and social ties. Analyzing this network, one can discover valuable insights into information flow within the organization. We develop this idea and propose a simple network model that is consistent with management theory, and that captures main traits of large corporations. The carcass of the model is an organizational hierarchy. We extend it by allowing additional types of connections such as collaboration, consultation, and friendship. Having both formal and informal interpersonal ties, our model supports a multilevel approach to social networks. Using a centrality-based definition of power, we are able to identify important individuals in the network. Our model provides novel insights into a range of organizational properties: (1) organizations have limited hierarchy height. (2) Flattening, the process when a business changes from a tall to a flat hierarchy by delayering, is intimately related to changes in the power of employees. (3) Informal relations significantly impact power of individuals. (4) Leadership styles could be reflected and analyzed through understanding weights on the ties in an organizational network. We implement our model and tools in a stand-alone application \({\mathsf{CORPNET}}\), which provides functions for generating synthesized organizational networks, analyzing and visualizing interpersonal relations, and computing network measures.

Keywords

Organizational networks Formal and informal ties Power Flattening Leadership styles 

Mathematics Subject Classification

90B50 91D30 

References

  1. Ahuja G (2000) Collaboration networks, structural holes, and innovation: a longitudinal study. Adm Sci Q 45:425–455CrossRefGoogle Scholar
  2. Anagnostopoulos A, Kumar R, Mahdian M (2008) Influence and correlation in social networks. In: Proceedings of the 14th ACM SIGKDD international conference on knowledge discovery and data mining. ACM, pp 7–15Google Scholar
  3. Baldwin D (1978) Power and social exchange. Am Polit Sci Rev 72(4):1229–1242CrossRefGoogle Scholar
  4. Barnard C (1938) The functions of the executive. Harvard University Press, CambridgeGoogle Scholar
  5. Barney J, Griffin R (1992) The management of organizations: strategy, structure, behavior. Houghton Mifflin, BostonGoogle Scholar
  6. Bonacich P (1987) Power and centrality: a family of measures. Am J Sociol 92:1170–1182CrossRefGoogle Scholar
  7. Bonacich P, Lloyd P (2001) Eigenvector-like measures of centrality for asymmetric relations. Soc Netw 23(3):191–201CrossRefGoogle Scholar
  8. Borgatti S, Everett M, Freeman L (2002) Ucinet for windows: software for social network analysis. Analytic Technologies, HarvardGoogle Scholar
  9. Bothner M, Stuart T, White H (2004) Status differentiation and the cohesion of social networks. J Math Sociol 28:261–295CrossRefMATHGoogle Scholar
  10. Bothner M, Smith E, White H (2010) A model of robust positions in social networks. Am J Sociol 116:943–992CrossRefGoogle Scholar
  11. Bothner M, Podolny J, Smith E (2011) Organizing contests for status: the matthew effect vs. the mark effect. Manag Sci 57:439–457CrossRefMATHGoogle Scholar
  12. Brass D (1984) Being in the right place: a structural analysis of individual influence in an organization. Adm Sci Q 4:518CrossRefGoogle Scholar
  13. Brass D, Krackhardts D (2011) Power, politics, and social networks. In: Politics in organizations: theory and research considerations. Routledge, London, pp 355–375Google Scholar
  14. Bryan L, Matson E, Weiss L (2007) Harnessing the power of informal employee networks. McKinsey Q 3:13–19Google Scholar
  15. Castilla E (2011) Bringing managers back in: managerial influences on workplace inequality. Am Sociol Rev 76(5):667–694CrossRefGoogle Scholar
  16. Chaudhuri S, Dayal U, Narasayya V (2011) An overview of business intelligence technology. Commun ACM 54(8):88–98CrossRefGoogle Scholar
  17. Cross R, Parker A (2004) The hidden power of social networks. Harvard University Press, CambridgeGoogle Scholar
  18. Cross R, Borgatti S, Parker A (2002) Making invisible work visible: using social network analysis to support strategic collaboration. Calif Manag Rev 44(2):25–46CrossRefGoogle Scholar
  19. Easley D, Kleinberg J (2010) Networks, crowds, and markets: reasoning about a highly connected world. Cambridge University Press, CambridgeCrossRefMATHGoogle Scholar
  20. Ehrlich K, Carboni I (2005) Inside social network analysis. Technical report, IBM CorporationGoogle Scholar
  21. Emerson R (1962) Power-dependance relations. Am Sociol Rev 27(1):31–41CrossRefGoogle Scholar
  22. Fayol H (1917) Administration industrielle et g\(\grave{n}\)èrale; prèvoyance, organisation, commandement, coordination, controle. H. Dunod et E. Pinat, Paris (in French) Google Scholar
  23. Fire M, Puzis R, Elovici Y (2015) Organization mining using online social networks. Netw Spat Econ 1–34Google Scholar
  24. Fortunato S (2010) Community detection in graphs. CoRR abs/0906.0612 Google Scholar
  25. Franceschet M, Bozzo E (2015) A theory on power in networks. CoRR abs/1510.08332 Google Scholar
  26. French J, Raven B (1959) The bases of social power. University of Michigan Press, Ann ArborGoogle Scholar
  27. Geanakoplos J, Milgrom P (1991) A theory of hierarchies based on limited managerial attention. J Jpn Int Econ 5(3):205–225CrossRefGoogle Scholar
  28. Goleman D (2000) Leadership that gets results. Harvard Bus Rev 78(2):80–90Google Scholar
  29. Grimes A (1978) Authority, power, influence and social control: a theoretical synthesis. Acad Manag Rev 3(4):724–735CrossRefGoogle Scholar
  30. Katona Z, Zubcsek P, Sarvary M (2011) Network effects and personal influences: the diffusion of an online social network. J Mark Res 48(3):425–443CrossRefGoogle Scholar
  31. Kempe D, Kleinberg J, Tardos E (2015) Maximizing the spread of influence through a social network. Theory Comput 11:105–147MathSciNetCrossRefMATHGoogle Scholar
  32. Kipnis D, Schmidt S, Wilkinson I (1980) Intraorganizational influence tactics: explorations in getting one’s way. J Appl Psychol 65(4):440–452CrossRefGoogle Scholar
  33. Krackhardt D (1990) Assessing the political landscape: structure, cognition, and power organization. Adm Sci Q 35:342–369CrossRefGoogle Scholar
  34. Krackhardt D, Hanson J (1993) Informal networks: the company behind the chart. Harward Bus Rev 71(4):104–113Google Scholar
  35. Kubheka I, Kholopane P, Mbohwa C (2013) The effects of flattening hierarchies on employee performance in organizations: a study of a South African retail group. In: International conference on law, entrepreneurship and industrial engineering (ICLEIE’2013), pp 217–222Google Scholar
  36. Hall J (1972) A comparison of Halpin and Croft’s organizational climates and Likert and Likert’s organizational systems. Adm Sci Q 17(4):586–590CrossRefGoogle Scholar
  37. Hersey P, Blanchard K (1977) Management of organizational behavior: utilizing human resources, 3rd edn. Prentice Hall, Upper Saddle RiverGoogle Scholar
  38. Liu J, Moskvina A (2015) Hierarchies, ties and power in organizational networks: model and analysis. In: ASONAM ’15 Proceedings of the 2015 IEEE/ACM international conference on advances in social networks analysis and mining, pp 202–209Google Scholar
  39. Martinez A, Kane R, Ferris G, Brooks C (2012) Power in leader–follower work relationships. J Leadersh Organ Stud 19(2):142–151CrossRefGoogle Scholar
  40. McPherson M, Smith-Lovin L, Cook J (2001) Birds of a feather: homophily in social networks. Annu Rev Sociol 27:415–444CrossRefGoogle Scholar
  41. Meagher K (2003) Generalizing incentives and loss of control in an optimal hierarchy: the role of information technology. Econ Lett 78(2):273–280CrossRefMATHGoogle Scholar
  42. Morone F, Makse H (2015) Influence maximization in complex networks through optimal percolation. Nature 65–68Google Scholar
  43. Newman M (2006) Modularity and community structure in networks. Proc Natl Acad Sci USA 103(23):8577–8696CrossRefGoogle Scholar
  44. Newman M (2008) Mathematics of networks. Palgrave Macmillan, BasingstokeCrossRefGoogle Scholar
  45. Pfeffer J (1981) Power in organizations. Pitman, MarshfieldGoogle Scholar
  46. Raven B (1965) Social influence and power. Holt, Rinehart, Winston, New YorkGoogle Scholar
  47. Raven B (1992) A power interaction model on interpersonal influence: French and raven thirty years later. J Soc Behav Pers 7(2):217–244Google Scholar
  48. Sales S (1966) Supervisory style and productivity: review and theory. Pers Psychol 19:275–286CrossRefGoogle Scholar
  49. Tannenbaum R, Schmidt W (1973) How to choose a leadership pattern. Harvard Bus Rev 162–180Google Scholar
  50. Teubner T (2001) Flattening the organizational structure: encouraging empowerment or reinforcing control? In: Research in organizational change and development, vol 13, pp 147–168Google Scholar
  51. Tyler J, Wilkinson D, Huberman B (2003) Email as spectroscopy: automated discovery of community structure within organizations. In: Proceedings of the first international conference on communities and technologies, pp 81–96, Amsterdam, NetherlandsGoogle Scholar
  52. Weick K (1979) The social psychology of organizing, 2nd edn. McGraw-Hill, New YorkGoogle Scholar
  53. Wulf J (2012) The flattened firm—not as advertised. Calif Manag Rev 55(1):5–23CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Wien 2016

Authors and Affiliations

  1. 1.Department of Computer ScienceThe University of AucklandAucklandNew Zealand
  2. 2.School of Engineering, Computer and Mathematical SciencesAuckland University of TechnologyAucklandNew Zealand

Personalised recommendations